Mexico hopes fiber auction will drive more broadband adoption

The Mexican government wants to drive more broadband adoption country, and it believes it can achieve those goals by auctioning leases on state-owned fiber lines service providers can use to build networks in unserved areas.

As reported in Bloomberg, winning bidders will be able to leverage two fiber lines from state-owned utility Comision Federal de Electricidad (CFE). In addition, service providers can also bid on leases for fiber lines that run along the federal highway network.

According to the Organization for Economic Cooperation and Development, Mexico's broadband adoption rate is low. As of the end of 2010, the group said that the country had only 10.5 high-speed broadband subscriptions per 100 residents, placing it 32nd out of the 34 countries profiled in its report.

"We're promoting social connectivity with broadband," said Felipe Calderon, Mexico's president. "The plan includes contracts to connect schools and public spaces with high-speed Internet."

This is not the only time that the government has auctioned off state-owned fiber to drive competition in the market that's been dominated by incumbent provider Telmex.

In 2010, a consortium led by Grupo Televisa SAB with partners Megacable (Mexico: MEGACPO.MX) and Telefonica SA (NYSE: TEF), won a 20-year $69.3 million lease for a fiber optic network from the CFE.